Tuesday PM August 25th, 2009
by: Ed Mayberry, August 25, 2009 9:08:46 pm
Exterran Holdings is laying off 274 employees, or three per cent of its work force, and will close two facilities. The Houston-based natural gas compression firm tells the Texas Workforce Commission that it will close its Schulenberg and Columbus manufacturing facilities, laying off 73 employees. The company's Brittmore facility in Houston is laying off 79 and its North Houston Rosslyn facility is laying off 122 workers. The layoffs began August 20th.
The Postal Service is offering $15,000 buyouts to employees in an effort to cut costs at a time when the post office is being buffeted by the recession and the popularity of e-mail and electronic bill payment. Up to 30,000 employees could take the offer. The post office says it could save as much as $500 million next year. The offer is open to those eligible for retirement and early retirement. It also includes employees in select positions, such as retail clerks, distributors and mail handlers who are willing to resign voluntarily. Letter carriers are not eligible. The workers have to decide by September 25th. The Postal Service expects to be $7 billion in the red by the end of the fiscal year on September 30th.
More than half of employers surveyed plan to hire more full-time employees in the next year, according to a survey by Robert Half International and Career Builder, as reported in the Houston Business Journal. Top hiring is expected in technology, customer service and sales. Some 32 per cent expect to hire staff-level employees and 28 per cent plan to hire entry-level workers. And 49 per cent of employees polled expect raises after the economy improves.
Consumer sentiment rose more than expected in August, an indication that Americans' pessimism about the economy may be lifting. The New York-based Conference Board says its consumer confidence index rose to 54.1 from an upwardly revised 47.4 in July. Economists surveyed by Thomson Reuters had expected a slight increase to 47.5. Still, the index is far below 90, the minimum level associated with a healthy economy. Economists closely monitor confidence because consumer spending accounts for about 70 per cent of U.S. economic activity. Consumer sentiment--fueled by signs the economy is stabilizing—has recovered a bit since hitting a record-low of 25.3 in February.
The rate at which credit card holders fell behind on their payments was far worse in the second quarter than it was last year, but did improve sharply from the alarming level seen in the first three months of 2009. According to credit reporting agency TransUnion, the shift since the first quarter shows that consumers handled their credit better, even as job losses mounted and the recession deepened. TransUnion says the rate of bank-issued credit card payments that were 90 days or more past due shot up to 1.17 per cent for the three months ended in June, from 1.04 per cent in the 2008 period. But the figure was down significantly from the first quarter of this year, when 1.32 per cent of card holders were three months or more behind on the payments. That improvement came despite soaring unemployment and other economic pressures.
A closely watched index shows home prices posted their first quarterly increase in three years, signaling the housing market has turned a corner. The Standard & Poor's/Case-Shiller's U.S. national home price index rose nearly three per cent from the first quarter, though was still down almost 15 per cent from the second quarter last year. Home prices are at levels not seen since early 2003. The monthly index of 20 major cities increased 1.4 per cent from May to June, the second straight month the index registered a gain. It was still 15 per cent below June a year ago.
A new report says Texas banks are more profitable and healthier than most nationwide. An Austin-based financial industry consulting firm, Sheshunoff & Co. Investment Banking, issued the report. The report did not name individual banks. It said Texas banks are well-diversified, doing significant business in energy, health care and agriculture, all of which have fared better than most other sectors. Only two banks have failed in Texas this year. Austin-based Guaranty Bank on Friday became the second-largest U.S. bank to fail. Millennium State Bank of Texas in Dallas failed earlier in the year. The recession has led to 81 bank failures nationwide this year.
White House officials project lingering high unemployment in the short term and a massive ten-year federal deficit of $9 trillion that feeds a ballooning national debt. White House Budget Director Peter Orszag and Economic Adviser Christina Romer cited a worse-than-expected economic crisis for the dire fiscal landscape. In May, the administration had predicted a $7 trillion deficit for 2010-2019. In documents and in remarks, the White House officials said the economy this year will contract by 2.8 per cent, more than twice what they had predicted earlier this year.
Congressional budget analysts project a cumulative $7 trillion deficit from 2010-2019, a figure roughly $2 trillion less than the one projected by the White House Budget Office. The nonpartisan Congressional Budget Office, in a report that came out on the same day as the White House midyear budget review, said the deficit this year will total $1.6 trillion and that putting the nation on a sustainable fiscal course will require a mix of lower spending and higher tax revenues than the amounts now projected. The White House also projected a $1.6 trillion deficit this year, but a gloomier $9 trillion ten-year shortfall.
Now comes the hard part for the auto industry--luring customers without big cash for clunkers discounts. The popular government rebates gave auto sales a jolt, but it was only temporary. Now car makers and dealerships are forced once again to confront the worst market in a quarter-century. While cash for clunkers may have proved there are still car buyers out there, it's unlikely the heavy demand will last. In fact, the big rush to car lots this month may have had the unintended effect of stealing sales from this fall and next year. Cash for clunkers, which offered drivers as much as $4,500 off the price of a new, more fuel-efficient car, proved far more popular than anyone imagined. Through Monday, dealers reported selling 625,000 vehicles in just a month with the rebates. The program ended Monday night.
Car dealers now have until 8 p.m. CDT to submit their paperwork so they can be reimbursed under the just-ended cash for clunkers program. The deadline was be extended even further because of problems with its web site. Government computers have been deluged by dealers trying to send in their sales agreements at the last minute. The big rush of submissions shut down the government's computer filing system temporarily. That raised concern among dealers that they wouldn't be repaid for the $3,500 or $4,500 per vehicle incentives, and prompted them to push for an extension. Cash for clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective.
President Barack Obama has announced he wants Ben Bernanke to get a second four-year term as head of the Federal Reserve, praising his "calm and wisdom" in the face of a near financial collapse. Standing alongside Bernanke for the statement on the island of Martha's Vineyard, Obama said the country is "a long way away" from a complete economic recovery. But the vacationing president also said the 55-year-old Bernanke tackled the crisis "with bold action and outside-the-box thinking" that helped limit the damage. Bernanke succeeded Alan Greenspan as head of the country's leading agency on monetary policy, and his nomination to another term is subject to Senate confirmation.
The Port of Houston Authority has approved the distribution of $2.85 million from the Environmental Protection Agency in Diesel Emission Reduction Act grant funds to replace cargo handling equipment. The funds come from the American Recovery and Reinvestment Act of 2009.
The City of Houston Department of Aviation has been awarded $8.8 million in grants from the Federal Aviation Administration's Airport Improvement Program. The funds will be used to help replace the outdated gas-powered steam generation system used at George Bush Intercontinental Airport. Solar panels and new heaters and chillers will be installed in the airport's central operating plant, which controls air conditioning and heating in all five airport terminals.
A federal appeals court has ruled that billionaire R. Allen Stanford must stay in jail until his Texas trial on fraud charges. The 5th U.S. Circuit Court of Appeals in New Orleans upheld a lower-court ruling that revoked Stanford's bond on the grounds that he is a flight risk. The judges wrote that Stanford "has the means, the motive, and the money to flee." Stanford's attorneys had argued that the 59-year-old was not a flight risk, citing his family ties in Houston. Stanford and four executives of his now defunct Stanford Financial Group are accused of orchestrating a massive ponzi scheme in a criminal indictment in Houston. Investigators said Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself.
Apple's newest operating system software, dubbed Snow Leopard, is to go on sale this Friday. The Mac OS X version 10.6 software debuts at Apple's retail stores and authorized resellers nationwide. Apple's Web site is now taking orders. Snow Leopard's release comes days before its promised September launch. And it precedes by two months release of Microsoft's next operating system Windows 7. Among Snow Leopard's improvements is built-in support for Microsoft's exchange server software, so Apple programs for e-mail, calendars and contacts could become more useful in corporate settings. Apple said Snow Leopard is half the size of the previous version, freeing up to seven gigabytes of storage space when installed. It requires a minimum of one gigabyte of ram and runs on Macs using an Intel processor.
Sony says it is going to begin selling an e-book reader with the ability to wirelessly download books. That adopts a key feature of the competing Kindle from Amazon.com. The reader daily edition will cost $399 and be on the market by December. Sony has produced e-book reading devices with "electronic ink" displays for the U.S. market since 2006, but has seen most of the attention stolen by Amazon.com, which launched the Kindle in 2007. The latest version of the Kindle costs $299. Sony recently announced an e-book reader that retails for $199, but it doesn't have wireless capabilities. It has to be connected to a computer to acquire books.
Maytag is recalling about 46,000 refrigerators under the Maytag, Magic Chef, Performa by Maytag and Crosley brand names, due to a fire hazard. Because of an electrical failure in the device that turns on the compressor, the company said there is a chance of overheating that can lead to fire. About 1.6 million similar refrigerators were recalled in March. Maytag, which is now part of Whirlpool, said it has received 23 more reports of refrigerators catching fire. Of those, there were four reports of property or smoke damage. The refrigerators in question are side-by-side and top freezer refrigerators made in black, bisque, white and stainless steel. They cost between $350 and $1,600 and were sold from September 2000 to May 2004.